Bingo Budget Bonanza – EY Budget 2014 comment
19 March 2014
Robert Hodges, Director, Energy Tax Services at EY comments on impact of onshore allowance on shale gas industry:
“The onshore allowance is aimed at stimulating investment in this new and nascent industry. It will be welcome news for the shale gas industry which needs to commit significant investment to prove commercial reserves in the UK.
“Under the new incentive, a portion of profit equal to 75% of a company's qualifying onshore capital expenditure will be exempt from supplementary charge. This portion of the profit will then be subject to tax at 30%, while the remaining profit will be subject to a marginal tax rate of 62%, as is usually the case with oil and gas companies operating in the UK.
“The Government also announced it will work with industry to ensure that the UK has the right skills and supply chain in place. This is an important commitment, which will be welcomed by industry, to ensure that the UK maximises the benefit from the development of its indigenous oil and gas resources.
“EY is working on a supply chain and skills review which aims demonstrate the potential for wider industry to benefit from the development of the shale gas industry in the UK as it enters the next phase of its development. This study is expected to be published by the end of April”
For more information on the 2014 Budget, visit the EY 2014 Budget page.